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Monaco: Offshore Legal and Tax Regimes

Taxation of Foreign Employees of Offshore Operations

This section refers to the taxation of foreign employees of the various types of offshore entity; see Domestic Personal Taxation for the general principles of individual taxation in Monaco, which also apply to the resident employees of non-resident entities.

There is in fact no distinction between the employees of resident or non-resident operations. There are in any event no individual taxes on employment or other income in Monaco; however, social security contributions are payable by the employer in all circumstances, and these amount to 40% for the employer, 10% for the employee.

In 2004, Monaco was forced to join the EU's Savings Tax Directive regime, and agreed to impose a withholding tax on the interest income of EU residents at the same rate as Austria, Belgium and Luxembourg (initially 15%, rising to 20% on 1 July 2008, and to 35% on 1 July 2011) and to hand over 75 per cent of such revenues to the Member State of the EU resident concerned. Monaco also agreed to exchange information on request in criminal or civil cases of tax fraud or similar misbehaviour. The new regime came into effect from 1st July 2005.

 

 

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